Corporate environmental initiatives in the Chinese context: Performance implications and contextual factors

Hugo K.S. Lam, Cheong Leung Yeung, T. C. E. Cheng, Paul K. Humphreys

Research output: Journal article publicationJournal articleAcademic researchpeer-review

40 Citations (Scopus)


Due to the unique social and economic environments in China, the performance implications of environmental management might be quite different in the Chinese context. We examine the impact of corporate environmental initiatives (CEIs) on the market value of firms in China. We find that, in contrast to the findings in the Western context, Chinese investors react negatively to CEI announcements. The negative reaction is more significant when the announcements are related to processes rather than products, and for state-owned enterprises rather than privately-owned corporations. However, there is no difference whether the CEI is self-declared or third-party endorsed. Overall, our research indicates that Chinese investors consider CEIs to be in conflict with shareholder interest. In particular, CEIs in state-owned enterprises might be considered by investors as signals that firms need to sacrifice profits to shoulder more social responsibility.
Original languageEnglish
Pages (from-to)48-56
Number of pages9
JournalInternational Journal of Production Economics
Publication statusPublished - 1 Oct 2016


  • Abnormal returns
  • China
  • Corporate environmental initiatives
  • Event study

ASJC Scopus subject areas

  • Business, Management and Accounting(all)
  • Economics and Econometrics
  • Management Science and Operations Research
  • Industrial and Manufacturing Engineering


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